(April 3, 2023)

SMPG GO D [2023] No. 11

Attention: all District People’s Governments, all Commissions, Offices and Bureaus (Administrations) of the Municipal People’s Government, and all relevant responsible units:

Several Measures of Shanghai Municipality to Enhance the Attraction and Utilization of Foreign Investment were approved by the Municipal People’s Government and are hereby issued to you. You are required to implement them conscientiously.

Several Measures of Shanghai Municipality to Enhance the Attraction and

Utilization of Foreign Investment

With a view to thoroughly implementing the guiding principles established at the 20th CPC National Congress, vigorously promoting high-level opening up, enlarging foreign investment, stabilizing its size and improving its quality, giving full play to the positive role of foreign investment in creating a new development setup and promoting high-quality development, several measures of this Municipality to enhance the attraction and utilization of foreign investment are hereby formulated as follows:

1. Promoting High-level Opening up

1. Promoting opening up in more sectors and introducing more projects to Shanghai. Efforts shall be made to carry out the latest version of national and free trade zone negative list concerning the access of foreign investment, to further implement the national comprehensive pilot program for wider opening of the service sectors, and to accelerate the introduction of projects in open fields including finance and shipping. Qualified foreign-invested companies of securities, funds, futures, life insurance, pension management, wealth management, and finance are to be supported as the first group of companies to settle in Shanghai and expand their scopes of business. Qualified international container liner companies are encouraged to undertake coastal container transshipment on an experimental basis, so as to further amplify the effect of the coastal transshipment policy. Efforts will be made to obtain approval of trials of wider opening in such fields as telecommunications, the Internet, education, culture and medical care in Shanghai. (Departments and units responsible for implementation: the Municipal Development & Reform Commission, the Municipal Commission of Commerce, Shanghai Head Office of the People’s Bank of China, the Municipal Financial Regulatory Bureau, Shanghai Office of China Banking and Insurance Regulatory Commission, Shanghai Office of China Securities Regulatory Commission, the Municipal Transportation Commission, Shanghai Customs, and the Municipal Administration for Market Regulation)

2. Supporting key areas to take the lead in opening-up. To implement the upgrading strategy of China (Shanghai) Pilot Free Trade Zone, and comply with high-standard international economic and trade rules such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Digital Economy Partnership Agreement (DEPA), Shanghai will take the lead in initiating institutional opening-up in terms of rules, regulatory practice, administration and standards. The customs special supervision area within China (Shanghai) Pilot Free Trade Zone is supported to expand the product scope of global maintenance and repair on a pilot basis, and it will then actively seek to apply to the State to replicate and promote such proven experiences to customs special supervision areas outside China (Shanghai) Pilot Free Trade Zone. Efforts shall be made to scale up bonded fuel oil and bonded LNG refueling services for international voyage vessels, and to advance pilot projects for new types of green fuel refueling in order to improve the refueling services of Shanghai Port. The Hongqiao International Central Business District shall endeavor to explore opening-up measures in such fields as digital trade, financial service, information service, and conventions and exhibition service, to accelerate the clustering of high-level international professional service entities, and to compile and publish the “Hongqiao Openness Index”. (Departments and units responsible for implementation: the Municipal Commission of Commerce, the Municipal Development & Reform Commission, Shanghai Customs, the Municipal Transportation Commission, China (Shanghai) Pilot Free Trade Zone Administration, Lin-gang Special Area Administration, and Hongqiao International Central Business District Administrative Committee)

II. Upgrading the Capacity to Attract Foreign Investment

3. Optimizing the industrial structure of foreign investment. The “Catalogue of Encouraged Industries for Foreign Investment (2022 edition)” shall be put into effect to channel more foreign investment to fields including advanced manufacturing, modern service, high-tech, energy-saving, and environmental protection. Eligible and encouraged foreign-invested projects are supported to enjoy tariff exemption policies on imported equipment for their own use in accordance with relevant provisions, and encouraged foreign-invested industrial projects which use land economically and intensively will enjoy priority in supply of land. Foreign investment is encouraged to fully leverage their own capital and technological advantages, to make more investment in three leading industries including integrated circuits, biological medicine and artificial intelligence, and in six key industries including electronic information, life and health, automobiles, high-end equipment, cutting-edge materials, and fashion consumer goods, as well as in industries racing on new lanes and industries of the future. Foreign-invested enterprises are supported to enjoy equal access to various industry policies, as well as to policies on technological upgrading, and digital transformation, among others. (Departments and units responsible for implementation: the Municipal Commission of Economy and Information, the Municipal Development & Reform Commission, the Municipal Commission of Commerce, the Municipal Finance Bureau, the Municipal Bureau of Planning and Natural Resources, and Shanghai Customs)

4. Supporting the improvement of quality and capacity of foreign-invested headquarters enterprises. Policies supporting the development of headquarters enterprises such as Provisions of Shanghai Municipality on Encouraging Multinational Companies to Establish Regional Headquarters and Several Opinions  of Shanghai Municipality on Encouraging Enterprises to Establish Trade Type Headquarters shall be put in place, so as to vigorously attract foreign investment to establish various types of headquarters in Shanghai, such as regional headquarters, independent business unit headquarters, and trade-type headquarters, among which eligible headquarters enterprises may enjoy financial support and awards in accordance with laws, rules and regulations. Supportive measures in terms of fund operation and management, trade facilitation, scientific and technological innovation, business registration, talent recruitment, and entry-exit facilitation shall be put into effect to help these headquarters enterprises to concentrate their business, expand their functions and enhance their capabilities in Shanghai. (Departments and units responsible for implementation: the Municipal Commission of Commerce, the Municipal Finance Bureau, Shanghai Head Office of the People’s Bank of China, Shanghai Customs, the Municipal Science and Technology Commission, the Municipal Administration for Market Regulation, Exit-Entry Administration Bureau of the Municipal Public Security Bureau, and all district people’s governments)

5. Accelerating the development of foreign-invested research and development (R&D) centers. The national policy on tax incentives for scientific and technological innovation shall be implemented, under which foreign-invested enterprises may enjoy pre-tax deductions for eligible R&D expenditure, and tax exemption or refund for equipment purchases as prescribed. The administrative processes of intellectual property transfer to foreigners and import and export of technology shall be optimized to achieve a complete set of systems, linkage between various mechanisms, and optimal processes for transferring intellectual property to foreigners. Specific training and guidance shall be provided on cross-border flow of research and development data in accordance with law. Bio-security risk assessment shall be actively conducted on the plants, animals, transgenic organisms and biological materials imported by foreign-funded R&D centers for national-level and municipal-level scientific research projects, and in the case of those that have passed the assessment as required, facilitated quarantine examinations and approvals shall be granted. Extended time limits shall be granted in accordance with relevant provisions for re-export of key R&D equipment, test vehicles, etc., which were temporarily introduced into the Chinese mainland for R&D purposes by foreign-invested centers. Foreign investment is encouraged to set up open and innovative platforms, for which strengthened support in land, equipment, infrastructure and other factors of production shall be guaranteed. Foreign-funded R&D institutions in Shanghai are promoted to carry out collaborative innovation with local enterprises, universities and research institutions in  this Municipality, and to establish foreign-funded R&D institutions-led collaborative innovation projects, from which collaborative innovation cases may be selected. Enhanced guidance and service shall be offered to foreign-funded R&D centers in their application for being recognized as high-tech enterprises. (Departments and units responsible for implementation: the Municipal Commission of Commerce, the Municipal Science and Technology Commission, the Municipal Commission of Economy and Informatization, the Municipal Finance Bureau, the Municipal Tax Service, the Cyberspace Affairs Commission of the CPC Municipal Committee, the Municipal Intellectual Property Office, the Municipal Agriculture and Rural Affairs Commission, Shanghai Customs, the Municipal Bureau of Planning and Natural Resources, and the Municipal Education Commission)

6. Encouraging foreign investment in the building of Shanghai city as an international consumption center. More efforts shall be made to promote Shanghai globally as a city of international consumption center, and carry out a new round of special planning on Shanghai’s commercial space layout. Foreign investment is encouraged to engage in the development of two “international consumption cluster areas”, one in the eastern side and the other in the western side of Shanghai, and also to engage in the construction of the key commercial projects known as “international consumption window”. International consumer product brands are encouraged to upgrade the capacities of their headquarters in Shanghai, to introduce a batch of international mid-to-high end new brands, and to set up more high-level first stores and launch more new products in Shanghai. International brands that open their first high-level or flagship stores in Shanghai, and launch globally influential debut releases, debut shows and debut exhibitions in Shanghai in the year will be included as companies that may enjoy the policies for supporting consumer market innovation in Shanghai. (Departments and units responsible for implementation: the Municipal Commission of Commerce, and the Municipal Finance Bureau)

7. Accelerating the green and low-carbon upgrading. Foreign investment is guided to actively participate in the “peak carbon emissions and carbon neutrality” strategy. Efforts shall be made to foster green and low-carbon industries and build green manufacturing systems, to support the development of green technologies, design of green products, construction of green factories, building of green supply chains, and establishment of model green-design enterprises. Foreign-invested enterprises are supported to participate in the research and development of green and low-carbon technologies and in the promotion of their application. Foreign-invested enterprises are encouraged to participate in energy conservation and emission reduction, and to upgrade, renovate, recycle and reuse products and equipment in key fields; and preferential policies will be adopted such as faster depreciation of fixed assets, corporate income tax reductions and exemptions for energy- and water-saving products, equipment and projects, and value-added tax refund upon tax collection for products made from comprehensive utilization of resources. (Departments and units responsible for implementation: the Municipal Economy and Informatization Commission, the Municipal Development & Reform Commission, the Municipal Bureau of Ecology and Environment, the Municipal Finance Bureau, and the Municipal Tax Service)

III. Enhancing Support for the Development Elements of Foreign Investment

8. Strengthening service guarantees for introducing foreign investment projects. A sound task force mechanism dedicated to handling significant and key foreign investment projects shall be established, which aims to establish and dynamically adjust the list of such projects, strengthen services by project liaison officials, and enhance all-round guarantee for elements of foreign investment. Supportive policies shall be made in accordance with laws, rules and regulations on project planning, land use, energy use, and construction. The whole-process tracking services shall be strengthened to facilitate foreign investment in project approval and record-filing, environmental impact assessment, logistics, cross-border capital receipt and payment, and personnel entry and exit so as to accelerate the introduction, construction and entry into production of a number of significant and key foreign investment projects. (Departments and units responsible for implementation: the Municipal Development & Reform Commission, the Municipal Commission of Commerce, the Municipal Commission of Economy and Informatization, the Municipal Commission of Housing and Urban-Rural Development, the Municipal Bureau of Planning and Natural Resources, the Municipal Bureau of Ecology and Environment, the Municipal Transportation Commission, Shanghai Head Office of the People’s Bank of China, and Exit-Entry Administration Bureau of the Municipal Public Security Bureau)

9. Increasing financial and tax support for introducing foreign investment projects. The policy will be implemented of temporarily not collecting the “withholding income tax” on the profits distributed from resident enterprises within the Chinese mainland to overseas investors if the latter use the profits for direct investment. More efforts shall be made to publicize this policy and optimize the handling procedures, and make it more convenient for foreign-invested enterprises to enjoy the policy. Each district may, based on its actual conditions, and within its statutory authority, provide incentives to foreign-invested enterprises, newly invested projects by foreign investors and profit reinvestment by foreign-invested enterprises if such enterprises and projects are in line with the industrial development guidelines of this Municipality, and after their overall contributions to the local economic and societal development have been taken into consideration. (Departments and units responsible for implementation: the Municipal Commission of Commerce, the Municipal Development and Reform Commission, the Municipal Finance Bureau, the Municipal Tax Service, and all district people’s governments)

10. Strengthening the financial support and service. Eligible foreign-invested enterprises are encouraged to go public at Shanghai, Shenzhen, and Beijing Stock Exchanges, to be listed at the NEEQ (National Equities Exchange and Quotations) and regional equity markets, and to issue corporate debentures for financing. Various financial institutions are supported to innovate products and services under the premise of compliance with laws and controllable risks. Eligible foreign-invested enterprises may be provided, on market-oriented principles, with high-quality financial services and financing support, including regular holding of docking activities for banks and enterprises on relevant policies. To leverage the role of the Financing Comprehensive Credit Service Platform (Shanghai) for Small and Medium-sized Enterprises, innovations shall be made to provide financing credit services and seek to expand financing channels for foreign-invested small and medium-sized enterprises. ( Departments and units responsible for implementation: Shanghai Head Office of the People’s Bank of China, Shanghai Office of China Banking and Insurance Regulatory Commission, Shanghai Office of China Securities Regulatory Commission, the Municipal Financial Regulatory Bureau, and the Municipal Development & Reform Commission)

11. Facilitating cross-border investment and financing. The policy for Qualified Foreign Limited Partners (QFLP) shall be implemented on a pilot basis, and the foreign investment channels of QFLP funds shall be expanded in Shanghai city-wide on a pilot basis. Foreign exchange registration shall be simplified, and the QFLP funds shall be administered by means of “fund balance and fund size as required”, and the RMB raised overseas are encouraged to be directly invested within the Chinese mainland. Pilot enterprises are encouraged to carry out circular investment within the Chinese mainland. (Departments and units responsible for implementation: Shanghai Head Office of the People’s Bank of China, Shanghai Branch of the State Administration of Foreign Exchange, the Municipal Financial Regulatory Bureau, and the Municipal Commission of Commerce)

12. Facilitating foreign citizens’ entry and exit. Various policies to facilitate foreigners to work in China shall be comprehensively implemented, a pilot program shall be launched on establishing the conditions and standards for recognizing foreign “highly talented professionals and urgently-needed talents”, and the scopes of foreign high-end talents (Class A) and foreign professional talents (Class B) shall be further expanded. National entry and exit policies and measures on supporting the construction of the Shanghai Science and Technology Innovation Center and the Shanghai High-land for High-level Talents shall be put into effect so as to facilitate the entry, exit, stay and residence of foreign-invested enterprises’ executives, foreign technical personnel and their family members. Efforts shall be made to advance the online service accessible to foreigners in their pre-application for “port visa”, to ensure the applicants’ “zero offline visit”. The “single window” service open to foreigners for the convenience of their work and residence shall be improved and optimized, and the mode of online-offline integrated service shall be fully advanced so as to make it more convenient and efficient for foreigners to apply for work permits and residence permits. Efforts shall be made to facilitate wider social use of the Foreigner’s Permanent Residence Card, to provide sound social services to enhance the “sense of gain” of permanent resident foreigners, and to further optimize the development environment for foreign talents. (Departments responsible for implementation: the Municipal Science and Technology Commission (the Municipal Administration of Foreign Experts Affairs), Exit-Entry Administration Bureau of the Municipal Public Security Bureau, and Shanghai General Station of Immigration Inspection)

13. Supporting foreign-invested enterprises to enhance their trade capacities. Efforts shall be made to implement the Regional Comprehensive Economic Partnership Agreement (RCEP) to meet high standards, and to improve the origin inquiry system and the most favorable tariff rate inquiry system of the “Shanghai International Trade Single Window”. The enterprise-benefiting function of this Municipality’s service and consultation station for the RCEP enterprises shall be improved, in order to provide foreign-invested enterprises through multiple online and offline channels with consultation services on preferential tariff, rules on origin, rules of trade in goods, customs procedures and trade facilitation, movement of natural persons and other related preferential measures under the RCEP. Multinational enterprises are supported to upgrade their network services for global supply chain, and qualified enterprises may apply for the award of model enterprises of the Shanghai International Trade Distribution Center. Further efforts shall be made to publicize trade facilitation policies, and to provide foreign-invested enterprises with service and guidance in terms of free trade agreements, trade clearance, and economic and trade risk prevention and response. (Departments responsible for implementation: the Municipal Commission of Commerce, and Shanghai Customs)

IV. Optimizing Foreign Investment Services

14. Organizing a series of activities to promote investment. A series of investment promotion activities and conferences shall be organized and perfected such as “Invest in Shanghai” and “Ride the Wave of Rising Shanghai”, the Shanghai City Promotion Conference, and the Global Investment Promotion Conference. Shanghai will actively participate in the“Year of Investment in China”, the China International Fair for Investment and Trade and other investment promotion activities organized by the Ministry of Commerce. All districts are encouraged to carry out various forms of investment attraction activities, for which the Municipal People’s Government and district people’s governments may provide support based on the actual effects of the investment-attracting. Important platforms such as the China International Import Expo (the CIIE), the China International Industry Fair, and the World Artificial Intelligence Conference shall play a role in promoting investment, gathering business and transforming more exhibitors into investors. (Departments and units responsible for implementation: the Municipal Commission of Commerce, the Municipal Development & Reform Commission, the Municipal Commission of Economy and Informatization, the Municipal Finance Bureau, and all district people’s governments)

15. “Going global” to bring in more overseas investment. Relevant departments and all districts are encouraged to organize group visits abroad to invite investment, and put in more efforts to attract leading enterprises in the industrial and supply chains and headquarters projects by means of visits to certain places, presentation and promotion meetings, etc. The overseas offices of the Shanghai Foreign Investment Promotion Center shall play a part in integrating the city’s overseas investment-inviting network, and in strengthening contact and cooperation with overseas agencies for economic, trade and investment promotion so as to enhance the effect and efficiency of overseas investment-inviting activities. Trainings on promotion of foreign investment shall be organized to improve the professional skills of foreign investment promotion personnel of the whole Municipality. (Departments and units responsible for implementation: the Municipal Commission of Commerce, Foreign Affairs Office of the Municipal People’s Government, and all district people’s governments)

16. Improving the service mechanism for communication between government and enterprise. Smooth communication channels shall be established between municipal leaders and senior executive officers of multinational companies, including holding roundtables to promote communication between government and enterprise. The municipal and district governments shall make visits and investigations, and cooperate synergistically to solve the problems encountered in the production and operation of foreign-invested enterprises. In the case of policies that foreign-invested enterprises are concerned about, the relevant municipal departments and all district people’s governments shall offer interpretations and explanations so as to solve the “last mile” problem related to policy publicity and implementation. The Shanghai Investment Promotion Partnership (SIPP) shall play a role in establishing the service mechanism for docking with the relevant personnel designated by foreign chambers of commerce (associations) based in Shanghai, so as to carry out regular exchanges. (Departments and units responsible for implementation: the Municipal Commission of Commerce, and all district people’s governments)

17. Improving the foreign-related service platforms. Efforts shall be made to expand the functions of the Shanghai foreign investment promotion service platform, including providing multilingual services, and strengthening the construction of databases of foreign-investment-promoted projects, resources, policies and activities. The foreign-related service window of “Government Online-Offline Shanghai” shall be enriched to realize the online processing of common issues such as foreigners’ entry-exit and their work permits applications. Information guidance in both Chinese and English for foreigners shall be added on the app known as “sui shen ban”, including information on establishment and operation of foreign-invested enterprises, and relevant policies, and efforts will be made to offer more complete content in the e-brochure “A Collection of Shanghai Foreign-related Services”. (Departments and units responsible for implementation: the Municipal Commission of Commerce, General Office of the Municipal People’s Government, the Municipal Big Data Center, and all relevant departments)

18. Protecting the legitimate rights and interests of foreign investors. Both the municipal and district complaint centers for foreign-invested enterprises shall play a role in keeping open the complaint channels, regulating the complaint procedures and handling complaints in a timely and appropriate manner. This Municipality’s  coordination mechanism of joint meetings for serving enterprises shall be optimized, and foreign-invested enterprises are supported in their normal relocation as their development needs may require. Relevant municipal government departments and all district people’s governments shall not, in government procurement, treat differently the products and services produced and supplied by foreign-invested enterprises within the Chinese mainland so as to ensure equal participation of foreign-invested enterprises in government procurement. (Departments and units responsible for implementation: the Municipal Commission of Commerce, the Municipal Commission of Economy and Informatization, the Municipal Finance Bureau, the Municipal Administration for Market Regulation, the Municipal Tax Service, and all district people’s governments)

19. Enhancing protection of intellectual property rights. Digitally-empowered governance on intellectual property shall be strengthened to drive integrated “All-in-One-Go” service reform in terms of intellectual property protection. Efforts shall be made to accelerate the construction of a rapid and coordinated protection mechanism for intellectual property protection, and to leverage Shanghai Intellectual Property Protection Center and Shanghai Pudong Intellectual Property Protection Center in offering integrated, comprehensive and one-stop service, including prompt investigation, verification and protection of intellectual property rights for foreign-invested enterprises. The punitive compensation system against infringement on intellectual property rights shall be fully and effectively implemented, under which, persistent and special crackdowns shall be launched on such intellectual property infringement violations as patent infringement, Internet piracy, malicious registration of trademarks, counterfeit and confusion, and those who are suspected of committing crimes shall be handed over to the public security department in a timely manner. Special actions for customs-related intellectual property protection shall be carried out through stepping up the efforts to crack down on infringement acts and unlawful behaviors in importing and exporting so as to promote the effectiveness and efficiency of law enforcement. The Copyright Service Center of China (Shanghai) Pilot Free Trade Zone shall, with the support of relevant national-level departments, fully leverage its advantages to explore upgraded functions of copyright registration services based on the principle of “place of copyright acts” and breaking the limitations on the place of registration within the zone. (Departments and units responsible for implementation: the Municipal Intellectual Property Administration, the Municipal Administration for Market Regulation, the Municipal High People’s Court, Shanghai Customs, and the Municipal Copyright Bureau)

20. Encouraging participation in the formulation of standards. Foreign-invested enterprises are encouraged to equally participate in the formulation of local standards and group standards in accordance with law. Relevant information on the formulation of local standards shall be open to the public in accordance with law. Foreign-invested enterprises may recommend representatives to join this Municipality’s relevant technical committees on standardization. Opinions shall be full solicited from foreign-invested enterprises on the local standards closely linked to production and operation, such as on energy conservation and environment protection. (Departments and units responsible for implementation: the Municipal Administration for Market Regulation)

The above Measures shall be effective as of April 6, 2023.